CEO in line to get $189 million in sale of GGP

GGP will shower its CEO Sandeep Mathrani with a big payday when Brookfield Property Partners completes its $15 billion buyout of the Chicago shopping mall owner.

Mathrani could receive nearly $189 million through the cash-and-stock takeover, a sum representing his golden parachute payments and the value of GGP shares he currently owns, according to an analysis of a Securities & Exchange Commission filing that spells out the terms of the transaction.

Mathrani, 55, who ranks among the highest-paid CEOs of real estate investment trusts, has led GGP since 2011, just after the company emerged from bankruptcy. Under his leadership, GGP has trimmed its portfolio to focus on its best properties—including Water Tower Place on North Michigan Avenue and Oakbrook Center in Oak Brook—but retail landlords like GGP face a growing competitive threat from the rise of online shopping. Many investors have soured on the mall sector, and the company had a tough time attracting interest from other would-be buyers besides Brookfield.

Mathrani will receive an estimated $49.2 million golden parachute in the Brookfield deal, according to the SEC filing. That figure includes $7.1 million in cash and $42.1 million in restricted stock and equity through GGP's incentive plan. He receives the stock when the deal closes but receives the cash only if he is terminated within two years of the transaction, the filing says.

Mathrani also owns about 6.3 million shares of GGP stock, according to the filing. Of those, 396,272 are unvested restricted shares that should be included in the golden parachute, according to compensation consultant Mark Reilly, managing director at the Overture Alliance.

Excluding that stock, Mathrani owns 5.9 million shares. So, at $23.50 a share, Brookfield's cash-and-stock offer values Mathrani's stake at $139.4 million. Combined with his golden parachute, that means the deal could be worth an estimated $188.6 million to Mathrani.

"Relative to other executives, with only seven years of tenure, it is very generous," Reilly wrote in an email.

Mathrani also received $11.3 million in total compensation from GGP last year, down from $12.7 million in 2016, according to a proxy filed with the SEC last month.

A GGP spokesman did not respond to requests for comment.

Toronto-based Brookfield, which already owns 34 percent of GGP, is buying the rest of the REIT in the acquisition, which values the company at $15 billion. GGP persuaded Brookfield to increase its price from a $23-per-share offer in November. But the mall owner failed to attract competing bids that might have pushed the price even higher, a sign of the lack of the enthusiasm among investors for shopping malls.

"No third party had demonstrated to GGP or its advisors a willingness or ability to acquire all of GGP or a substantial portion of its assets," GGP said in the filing.